Five cities have been awarded $16.2 million in grants to set up centers to provide free financial counseling for low- income residents and integrate financial counseling into municipal services. The grants from Bloomberg Philanthropies and the Cities for Financial Empowerment Fund (CFE) will help establish Financial Empowerment Centers like those in New York City.
Cities awarded the grants include Denver; Lansing, Mich.; Nashville; Philadelphia; and San Antonio. The cities were selected from about 50 cities that competed for the grants.
The five cities will receive funds and technical assistance to set up centers where residents can receive one-on-one financial counseling from professional counselors. The advisors can help residents erase erroneous debts and correct credit histories, negotiate with creditors for more favorable payments and interest rates, and identify new sources of income such as unclaimed tax benefits.
The financial counseling centers will be open in the five cities in March. They are projected to serve more than 30,000 people over three years.
The centers are based on a model begun in New York in 2008. That program has grown to nearly 30 centers that have provided counseling to about 19,000 New Yorkers, helping them reduce their debt by more than $9 million and save nearly $1 million, according to Bloomberg.
The goal is to spur more cities to set up similar financial counseling programs. “Financial Empowerment Centers are a nationally recognized model of success with a proven track record in New York, providing better, faster and less costly outcomes,” Living Cities president Ben Hecht said in a statement. Living Cities’ CFE Fund is focused on changing the way municipal governments are thinking about social service delivery, particularly in this time of decreased resources.”